High hopes on deals spur stocks

Associated Press

Published 8:32 pm, Monday, April 28, 2014

Photo: Richard Drew

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Traders work at the post that handles Bank of America on the floor of the New York Stock Exchange, Monday, April 28, 2014. Bank of America sank 5 percent, to $15.14 after the bank unexpectedly announced it would suspend its stock buyback program and its plan to raise its quarterly dividend. The bank said it discovered an error in how the bank calculates its capital ratio, a crucial measure of a bank's strength.(AP Photo/Richard Drew) ORG XMIT: NYRD101 less

Traders work at the post that handles Bank of America on the floor of the New York Stock Exchange, Monday, April 28, 2014. Bank of America sank 5 percent, to $15.14 after the bank unexpectedly announced it ... more

Photo: Richard Drew

High hopes on deals spur stocks

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It was a roller coaster ride for the stock market on Monday that ended with major U.S. indexes closing mostly higher.

Stocks opened higher, fell in the afternoon, then mostly rose again in the last hour of trading.

Bank stocks fell after Bank of America said a financial error would force it to cancel its stock buyback plan and dividend increase, while health care stocks rose after U.S. drug giant Pfizer renewed its pursuit of a merger with British rival AstraZeneca. Formerly high-flying technology stocks fell again, dragging the Nasdaq composite index into the red.

The Standard & Poor's 500 index rose 6.03 points, or 0.3 percent, to close at 1,869.43. The Dow Jones industrial average rose 87.28 points, or 0.5 percent, to 16,448.74, and the Nasdaq edged down 1.16 points, or 0.03 percent, to 4,074.40. The Nasdaq erased most of a 61-point loss.

Bank of America sank $1, or 6.3 percent, to $14.95 after it announced it would suspend its stock buyback program and dividend increase. The bank discovered an error in how it calculates its capital ratio, a crucial measure of its strength. The Federal Reserve asked the bank to put its buyback and dividend increase on hold until the error was fixed.

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High-risk technology stocks were another area of weakness Monday as investors continue to cut their exposure to high-growth names. Amazon fell $7.25, or 2.5 percent, to $296.58 after falling 10 percent on Friday. Netflix lost $7.87, or 2.4 percent, to $314.21 and Facebook fell $1.57, or 2.7 percent, to $56.14.

In contrast, "old" technology companies such as Microsoft, Apple and IBM, which have more mature businesses and pay quarterly dividends, rose 2 percent or more Monday.